lot-date for average cost

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Martin Michlmayr

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Feb 4, 2018, 4:43:52 PM2/4/18
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The "How Inventories Work" document has the following example:

> 2016-07-28 * "Buy some shares of retirement fund"
> Assets:Invest 45.0045 VBMPX {11.11 USD}
> …

> 2016-10-12 * "Buy some shares of retirement fund"
> Assets:Invest 54.5951 VBMPX {10.99 USD}
> …

> Should result in a single lot with the total number of units and the averaged cost:
> units ccy cost cost-ccy lot-date label
> 99.5996 VBMPX {11.0442 USD, 2016-07-28, None}
^^^^^^^^^^

But average cost is calculated with the second transaction so
shouldn't the lot_date be 2016-10-12?

Also, what's the status of the average cost function?

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Martin Michlmayr
http://www.cyrius.com/

Martin Blais

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Feb 6, 2018, 12:44:16 AM2/6/18
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On Sun, Feb 4, 2018 at 4:43 PM, Martin Michlmayr <t...@cyrius.com> wrote:
The "How Inventories Work" document has the following example:

> 2016-07-28 * "Buy some shares of retirement fund"
>   Assets:Invest       45.0045 VBMPX {11.11 USD}
>  …

> 2016-10-12 * "Buy some shares of retirement fund"
>  Assets:Invest       54.5951 VBMPX {10.99 USD}
>   …

> Should result in a single lot with the total number of units and the averaged cost:
>          units ccy    cost    cost-ccy lot-date    label
>        99.5996 VBMPX {11.0442 USD,     2016-07-28, None}
                                         ^^^^^^^^^^

But average cost is calculated with the second transaction so
shouldn't the lot_date be 2016-10-12?

No, it's a choice.
See here in the incomplete code:

The thing is in the USA it may have tax consequences, e.g. LT vs. ST capital gains rates are different.
Perhaps the Right Thing to do would be to provide an option to select what should happen automatically.

 

Also, what's the status of the average cost function?


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Martin Michlmayr
http://www.cyrius.com/

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Martin Michlmayr

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Mar 16, 2018, 6:38:03 AM3/16/18
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* Martin Blais <bl...@furius.ca> [2018-02-06 00:43]:
> > > 2016-07-28 * "Buy some shares of retirement fund"
> > > Assets:Invest 45.0045 VBMPX {11.11 USD}
> >
> > > 2016-10-12 * "Buy some shares of retirement fund"
> > > Assets:Invest 54.5951 VBMPX {10.99 USD}
> >
> > > Should result in a single lot with the total number of units and the
> > averaged cost:
> > > units ccy cost cost-ccy lot-date label
> > > 99.5996 VBMPX {11.0442 USD, 2016-07-28, None}
> >
> > But average cost is calculated with the second transaction so
> > shouldn't the lot_date be 2016-10-12?
>
> No, it's a choice.
>
> The thing is in the USA it may have tax consequences, e.g. LT vs. ST
> capital gains rates are different.

I don't know much about US taxation but wouldn't it depend on the
*last* time you bought something?

> Perhaps the Right Thing to do would be to provide an option to select what
> should happen automatically.

Right, that might be a good idea.

Actually, I wanted to ask how the average cost method will work.
Presumably, if I buy some shares and then buy more shares, it will
calculate the average cost immediately?

Personally, I prefer to keep the original holdings as long as
possible. i.e. I'd prefer to calculate the average cost only when
needed (e.g. immediately before selling some).

Will this be possible? e.g. can I tell beancount not to use anything
and then easily call the average cost function from beancount code?

Martin Blais

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Mar 19, 2018, 4:19:48 AM3/19/18
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On Fri, Mar 16, 2018 at 6:38 AM, Martin Michlmayr <t...@cyrius.com> wrote:
* Martin Blais <bl...@furius.ca> [2018-02-06 00:43]:
> > > 2016-07-28 * "Buy some shares of retirement fund"
> > >   Assets:Invest       45.0045 VBMPX {11.11 USD}
> >
> > > 2016-10-12 * "Buy some shares of retirement fund"
> > >  Assets:Invest       54.5951 VBMPX {10.99 USD}
> >
> > > Should result in a single lot with the total number of units and the
> > averaged cost:
> > >          units ccy    cost    cost-ccy lot-date    label
> > >        99.5996 VBMPX {11.0442 USD,     2016-07-28, None}
> >
> > But average cost is calculated with the second transaction so
> > shouldn't the lot_date be 2016-10-12?
>
> No, it's a choice.
>
> The thing is in the USA it may have tax consequences, e.g. LT vs. ST
> capital gains rates are different.

I don't know much about US taxation but wouldn't it depend on the
*last* time you bought something?

Actually, to be realistic, in the US, everything I know that's allowed at average cost is treated as tax-free, e.g. in a 401k plan.
The reality is that for those lots, the date doesn't really matter, and besides perhaps some generic marker like "VARIOUS" would be the better treatment than making a choice.
That would introduce an inconsistency in the data type though, i.e, "sometimes the lot date field is VARIOUS".

In the meantime, I think an option to decide which date should be selected (oldest or newest) is totally fair game.



> Perhaps the Right Thing to do would be to provide an option to select what
> should happen automatically.

Right, that might be a good idea.

Actually, I wanted to ask how the average cost method will work.
Presumably, if I buy some shares and then buy more shares, it will
calculate the average cost immediately? 

Personally, I prefer to keep the original holdings as long as
possible.  i.e. I'd prefer to calculate the average cost only when
needed (e.g. immediately before selling some).

IIRC that's the proposal I put forward, that lot augmentations shouldn't merge immediately, but that lot reductions should trigger a merge before and after reducing (to recalculate the cost, in case you reduce at another cost than average).


Will this be possible?  e.g. can I tell beancount not to use anything
and then easily call the average cost function from beancount code?

Yes, I think this way it makes it automatic enough, yet it leaves some under your control.

Another option will also be to leave the account as e.g., FIFO but if/when you want to force averaging, you could use the unimplemented merge marker that's supported in the syntax, e,g. "{101.23 USD, *}".




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Martin Michlmayr
http://www.cyrius.com/

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Justus Pendleton

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Mar 19, 2018, 9:43:46 AM3/19/18
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On Monday, March 19, 2018 at 3:19:48 PM UTC+7, Martin Blais wrote:
Actually, to be realistic, in the US, everything I know that's allowed at average cost is treated as tax-free, e.g. in a 401k plan.

In Australia you are allowed to use average cost basis for taxable things (with a few restrictions[1]). So a "various" wouldn't work for Australia.

[1]: https://www.ato.gov.au/General/Capital-gains-tax/Shares,-units-and-similar-investments/Identifying-when-shares-or-units-are-acquired/

Martin Blais

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Mar 21, 2018, 9:57:54 PM3/21/18
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Well the shares have to have been acquired on the same day... might as well not count as average.


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